ARTICLE 64:06
SALES TAX
Chapter
64:06:01 Administration of program.
64:06:02 Services -- Interpretive rules.
64:06:03 Products -- Interpretive rules.
CHAPTER 64:06:01
ADMINISTRATION OF PROGRAM
Section
64:06:01:00 Definitions.
64:06:01:01 Armed services personnel and veterans.
64:06:01:01.01 Sales to or by the United States army and its instrumentalities upon military reservations.
64:06:01:01.02 Sales to governmental agencies.
64:06:01:01.03 Sales by United States government.
64:06:01:01.04 Public and municipal corporations.
64:06:01:02 Bond.
64:06:01:03 Repealed.
64:06:01:03.01 Bad checks.
64:06:01:03.02 Collection of a previously deducted bad debt or bad check.
64:06:01:04 Repealed.
64:06:01:05 Change in ownership.
64:06:01:06 Casual or occasional sales.
64:06:01:07 Issuance and use of permits restricted.
64:06:01:07.01 Application for tax permit.
64:06:01:07.02 Requirements for statewide tax permit.
64:06:01:07.03 Application for tax permit -- Streamline registration.
64:06:01:08 Exemption certificates.
64:06:01:08.01 Exemption certificates -- Forms accepted.
64:06:01:08.02 Services as components of other services.
64:06:01:08.03 Sale of service for resale.
64:06:01:08.04 Services performed on property held for sale.
64:06:01:09 Conditional sales contracts -- Assigned and repossessed merchandise.
64:06:01:09.01 Sale and leaseback contracts.
64:06:01:10 Consignment sales.
64:06:01:11 Repealed.
64:06:01:12 Defective merchandise.
64:06:01:13 Religious educational institutions.
64:06:01:14 Repealed.
64:06:01:15 Exemption certificates.
64:06:01:16 Repealed.
64:06:01:17 Federal corporations, sales to.
64:06:01:18 Repealed.
64:06:01:19 Fire and ambulance departments.
64:06:01:20 Forms.
64:06:01:21 Certain organizations not exempt from sales or use tax.
64:06:01:22 Repealed.
64:06:01:23 Intrastate sales -- Sale and delivery in South Dakota.
64:06:01:24 Interstate sales -- Originating in South Dakota.
64:06:01:25 Interstate sales -- Originating in other states.
64:06:01:26 Repealed.
64:06:01:27 Repealed.
64:06:01:28 Repealed.
64:06:01:29 Municipal tax -- Administration and reporting.
64:06:01:29.01 Repealed.
64:06:01:29.02 Repealed.
64:06:01:29.03 Repealed.
64:06:01:30 Municipal tax -- No special permit required.
64:06:01:31 Municipal tax -- Credit for tax previously paid.
64:06:01:32 Repealed.
64:06:01:33 Permit for each place of business in state.
64:06:01:33.01 Repealed.
64:06:01:34 Credit for tax previously paid.
64:06:01:35 Required records for sales, rentals, and leases.
64:06:01:35.01 Repealed.
64:06:01:35.02 Repealed.
64:06:01:35.03 Records to be preserved for three years -- Penalty for failure to maintain records.
64:06:01:35.04 Sample periods for audits.
64:06:01:35.05 Use of other records to verify audits.
64:06:01:36 Repealed.
64:06:01:37 Refunds to consumers.
64:06:01:38 Relief agencies.
64:06:01:39 Return of tax reports and telecommunications access fees.
64:06:01:39.01 Rate schedules.
64:06:01:39.02 Monthly filing.
64:06:01:39.03 Return and remittance -- Streamline volunteer registrations.
64:06:01:40 Preparation of return.
64:06:01:41 Returned merchandise.
64:06:01:42 Representing out of state dealers -- Extra permits.
64:06:01:43 Sales by loan or finance companies.
64:06:01:44 Sale of business permit not transferable.
64:06:01:45 Repealed.
64:06:01:46 Repealed.
64:06:01:47 Transferred.
64:06:01:48 Transferred.
64:06:01:49 Student sororities and fraternities.
64:06:01:50 Tax on gross receipts.
64:06:01:51 Repealed.
64:06:01:52 Transferred.
64:06:01:53 Reserved.
64:06:01:54 Temporary tax permits.
64:06:01:55 Temporary tax permit -- Application.
64:06:01:56 Bond -- Cancellation.
64:06:01:57 Transferred.
64:06:01:58 Reimbursement for expenditures.
64:06:01:59 Newspaper sales.
64:06:01:60 Gross receipts tax on visitor-related businesses -- No special permit required.
64:06:01:61 Application of sourcing rules.
64:06:01:62 Definition of terms used in sourcing rules.
64:06:01:63 General sourcing rules.
64:06:01:63.01 Sourcing rules for attorney services.
64:06:01:64 Sourcing rules for lease or rental of tangible personal property not included in §64:06:01:65 or 64:06:01:66.
64:06:01:65 Sourcing rules for motor vehicles, trailers, semi-trailers, or aircraft that do not qualify as transportation equipment.
64:06:01:66 Sourcing rules for transportation equipment -- Definition of transportation equipment.
64:06:01:67 Repealed
64:06:01:68 Sourcing rules for direct mailing.
64:06:01:68.01 Definition of terms used in direct mail sourcing rule.
64:06:01:69 Repealed.
64:06:01:70 Delivery charges.
64:06:01:71 Sourcing rules for computer maintenance contracts.
64:06:01:72 Sourcing software term license and subscriptions.
64:06:01:73 Definition of terms.
64:06:01:74 Sourcing rules of personal care services
Declaratory Ruling: A contested case hearing is not required prior to the revocation and cancellation of a sales tax exemption, but an aggrieved party may petition the agency for a declaratory ruling on the merits of whether the revocation and cancellation was proper. Secretary of Revenue Declaratory Ruling No. 80-3.
64:06:01:00.Definitions. The terms used in this chapter mean:
(1)"Transitory business," a business which engages in the vending, distribution, or sale of tangible personal property or products transferred electronically, or renders services at any place in the state for less than 45 days and does not become a permanent and continuous business in this state;
(2)"Seasonal business," a business which is carried on only during certain seasons or during definite segments of the year, not throughout an entire year;
(3)"Transient solicitor," a person who engages in the vending, distribution, or sale of tangible personal property or products transferred electronically, or renders services at any place in the state temporarily and is not a resident of this state.
Source: 2 SDR 40, effective December 8, 1975; 7 SDR 80, effective February 22, 1981; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 35 SDR 48, effective September 8, 2008.
General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3), 10-46A-19(3), 10-46B-18(3).
Law Implemented: SDCL 10-1-13.
Declaratory Rulings: Receipts from the sale of membership cards, which are required before individuals may shop for groceries in warehouse stores and which may be exchanged for merchandise worth approximately one-half of the value of the card, are not exempt from the sales tax which must be paid on the full cost of the membership cards. Secretary of Revenue Declaratory Ruling No. 80-8.
Production of bedding and ornamental plants in a greenhouse is not an "agricultural purpose," as defined in SDCL 10-45-1(8), and fuel used to heat the greenhouse is subject to the sales tax. Secretary of Revenue Declaratory Ruling 81-7.
64:06:01:01.Armed services personnel and veterans. Gross receipts from retail sales to persons in the armed services of the United States are subject to sales tax regardless where the merchandise is received. The fact that receipt is within a military reservation does not affect taxability of gross receipts derived from the transaction. Gross receipts from retail sales to all veterans are subject to sales tax.
Source: SL 1975, ch 16, §1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 28 SDR 178, effective July 1, 2002.
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-2.
64:06:01:01.01.Sales to or by the United States army and its instrumentalities upon military reservations. Sales tax does not apply to service organizations operating exclusively within a federal area over which the state of South Dakota has conceded all jurisdiction to the United States government. Sales to or by post exchanges, officers' clubs, mess, and noncommissioned officers' clubs and all other voluntary unincorporated organizations of army personnel authorized by the secretary of defense, or sales made by such organizations to any authorized purchaser, are also exempt. The term "authorized purchaser" includes those persons who are permitted to purchase from such organizations under regulations issued by the secretary of defense.
Sales to persons in the armed forces of the United States, including civilian employees in such service, are not exempt from sales tax, unless such sales are made to them as an authorized purchaser by a service organization exclusively within a United States military reservation and authorized by the secretary of defense.
Source: SL 1975, ch 16, §1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from §64:06:01:47, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995.
General Authority: SDCL 10-45-47.1.
Law Implemented: SDCL 10-45-10.
Declaratory Ruling: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
64:06:01:01.02.Sales to governmental agencies. Before purchases by a government or its subdivisions are exempted by the department, proof is required from the retailer that such sales were actually paid out of government funds or that the governmental agency provided an exemption certificate to the retailer.
No special exemption certificate is necessary when making sales to the United States, tribal governments, the District of Columbia, the State of South Dakota, other states, and their subdivisions if the billing or invoices indicate such sales and the records show that payment was received from the exempt governmental entity or that the purchases were made by a credit card issued to and in the name of the exempt governmental entity.
State boards and commissions created by law are exempt from sales or use tax. Boards and commissions created by legislative act are part of state government and sales to any board or commission are sales to the state.
This exemption does not extend to sales to or purchases of tangible personal property or any product transferred electronically for the personal use of officials, members, or employees of such institutions.
Source: SL 1975, ch 16, §1; 2 SDR 40, effective December 8, 1975; 8 SDR 81, effective January 10, 1982; 11 SDR 1, effective July 19, 1984; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from §64:06:01:48, 16 SDR 76, effective November 1, 1989; 19 SDR 42, effective September 29, 1992; 21 SDR 219, effective July 1, 1995; 22 SDR 6, effective July 23, 1995; 29 SDR 177, effective July 2, 2003; 30 SDR 58, effective November 5, 2003; 35 SDR 48, effective September 8, 2008.
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-10.
Declaratory Ruling: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
Court Decisions: A nonprofit corporation exempt from federal income tax, which provides free legal service to persons of low income and is funded by the federal government, qualifies as a relief agency under SDCL 10-45-10 and does not have to meet each factor enumerated in §64:06:01:38. East River Legal Services vs State, Department of Revenue, 303 N.W. 2d 379 (March 18, 1981).
A nonprofit corporation exempt from federal income taxes, which provides health and nutrition services for the elderly; education and development services for "headstart" and day care for children; weatherization, self-help gardens, and fuel assistance services for low income and elderly families; employment services for low income persons; and assistance and guidance to low income persons for community development, all without cost to recipients except for certain day care services, the activities of which are financed by the federal government, qualifies as a relief agency and is exempt from having to pay sales tax. Western South Dakota Community Action Program, Inc. vs State, Department of Revenue, 303 N.W. 2d 379 (March 18, 1981).
64:06:01:01.03.Sales by United States government. The United States government is not required to collect tax from the purchaser when making sales otherwise subject to sales tax unless the United States Congress has provided otherwise. Persons making purchases from the government of the United States or from any of the exempt agencies of tangible personal property, any product transferred electronically, and services that are subject to sales or use tax must report and pay sales or use tax measured by the purchase price unless the purchases are otherwise exempt.
Source: SL 1975, ch 16, §1; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from §64:06:01:52, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995; 35 SDR 48, effective September 8, 2008.
General Authority: SDCL 10-45-47.1(3), 10-46-35.1(3).
Law Implemented: SDCL 10-45-10, 10-46-4.
64:06:01:01.04.Public and municipal corporations. Gross receipts from sales to public or municipal corporations are exempt from sales tax. A public corporation or municipal corporation is one created by the state or a municipality, pursuant to authority granted by South Dakota law, for political purposes to act as an agency in the administration of civil government. The following are indicia of a public corporation or of a municipal corporation:
(1)It performs a governmental function;
(2)It is a nonprofit organization exempt from federal income tax;
(3)It is licensed or chartered by a division of state or local government;
(4)It is subject to inspection and audit accomplished or reviewed by a division of state or local government; and
(5)Some statutory provision is made for the levy of state or local taxes for funding of some activity of the organization or for authority to spend funds raised by taxation.
Source: 2 SDR 40, effective December 8, 1975; 5 SDR 60, effective January 25, 1979; 13 SDR 129, 13 SDR 134, effective July 1, 1987; transferred from §64:06:01:57, 16 SDR 76, effective November 1, 1989; 21 SDR 219, effective July 1, 1995.
General Authority: SDCL 10-45-47.1(3).
Law Implemented: SDCL 10-45-10.
Declaratory Rulings: The sales tax exemption from receipts of sales of tangible personal property to governmental agencies also applies to the gross receipts from sales of services to governmental entities. Secretary of Revenue Declaratory Ruling No. 79-3.
Public alcohol treatment facilities approved and funded by the state division of alcoholism are not political subdivisions of the state and are not exempt from sales tax. Secretary of Revenue Declaratory Ruling No. 80-4.
64:06:01:02.Bond. A cash bond endorsed in the name of the department or a bond issued by a corporate surety company authorized to do business in South Dakota in an amount sufficient to guarantee payment of tax for a six-month period is required from retailers engaged in business within the state of South Dakota in the following circumstances:
(1)A taxpayer is delinquent in either reporting or paying tax for two reporting periods in any twelve-month period;
(2)A taxpayer is engaged in a type of business which, in the experience of the department, has had problems with tax delinquency; or
(3)A taxpayer does not have sufficient unencumbered assets in this state to ensure that a possible future delinquent tax liability is collected.
If a taxpayer has no prior history of tax payment, the amount of the bond is based upon the taxpayer's estimate of gross receipts in a six-month period, provided that the taxpayer's estimate is determined by the department to approximate known receipts of similar businesses.
Source: SL 1975, ch 16, §1; 2 SDR 40, effective December 8, 1975; 5 SDR 60, effective January 25, 1979; 9 SDR 28, effective September 5, 1982; 11 SDR 1, effective July 19, 1984; 13 SDR 129, 13 SDR 134, effective July 1, 1987; 21 SDR 219, effective July 1, 1995; 28 SDR 178, effective July 1, 2002; 32 SDR 225, effective July 3, 2006.